Is the established bell curve a bottleneck for organisations looking for growth
Traditional and the most established model of appraisal is what we call as a Bell Curve model. The organization believes that a small percent of their workforce, say 5% are star performers followed by a little more number of employees who are ‘high performers’ and most of them are ‘Performers’ who have done what was assigned to them. The typical 5 (Star)-25 (High) -60 (Performers)-10 (Low Performers) model is popular in most of the companies today and has not changed much over several years. The HR and finance also finds it easier as fixed numbers of such performers make it easy for them to predict their annual increment outflow.
The bell curve model is based on the premise that under any situation, it is always true that only a small number of employees can be star performers. These people will always get the best increments and every effort is put to keep them in the organization. This sounds good so far. Situation however starts becoming murky as this rating is almost always dependent on the manager of the employee who more often than not is accused of favoring only favorite few. It is also observed that only a handful of the managers can remain very strict and unbiased. It is common understanding th with their ratings and as they become familiar with their team members, specially those with whom they work closely would almost always take away the star ratings. It essentially means that those who are rated as star performers by these managers are almost always rated stars, giving almost no scope for new employees to enter this coveted club. Fingers are also raised by employees on the capability of their manager’s ability to identify the true performers as well. This leads to a jam situation where even deserving employees who could be doing really great feels cheated and more often than not leave the organization. This situation also ends up encouraging mediocrity where there is no attempt ever made to challenge the star and high performers who tend to become relaxed and reduce on their performance in almost all the cases. Such performers see themselves as star performers for their tenure in the company more as a matter of right than their performance outcome. Such employees thereafter set the standards of performance that remains unchallenged that typically reduce over years, compromising the very basic fabric of the organization that was created by best talents.
This situation is called a downward spiral where it is easy to fall in the traps of internal politics, bureaucracy and silos that threaten the organization’s growth and eventually make them weak. Such a situation pushes top management to correct the situation but in most of the cases the fundamental issue is left unattended.
Old and established organizations have gained a lot of market share and minds of the customers. Normally it would have been easy for the biggies to continue with their ways unchallenged. The growth of the startup culture has started threatening the big companies. The threat has become severe because these small companies are coming with great innovations at low costs that is challenging the large company’s growth and profitability like never before. Suddenly every big and small company wants to work like a startup. They do everything including talking with latest buzzwords, giving inspiring speeches but would do a precious little to change themselves.
Many however do the change. Some in a planned way and some jump in without much thought. One such change is ‘abolishing the dreaded bell curve’. The journey however can be very challenging and have its own pains of chartering into unexplored territories by shaking something stable. Let us understand what makes the established bell curve model that worked well for so many years is not proving to be a good model any more. The truth of this curve getting abolished and what companies can face as a challenge in their growth and survival due to people engagement related to their performance evaluation will be discussed in my upcoming blogs.